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The Performance Governance System in the Philippines: Building the Capacity of Local Institutions

Elections are not the sole ingredient of a democracy. In a genuinely democratic state, the policymaking process must reflect the desires and priorities of the citizens, and state mechanisms must be capable of responding to their needs. Considered to be among the world’s worst performers in several areas of public governance, the Philippines continues to struggle in consolidating democracy. Corruption and unreliable public services at the local level of government are especially disruptive to smaller firms and community groups, even though they attract fewer headlines than central government scandals.

Recognizing the need to strengthen governance on the local level in the Philippines, CIPE has worked with the Institute for Solidarity in Asia (ISA) since 2004 to develop and promote the performance governance system (PGS) as a management tool for local governments across the Philippines. The PGS requires a city to implement a series of reforms that fundamentally transform its policymaking process and bureaucratic structure. When a city introduces the system, officials work with a broad-based community group to design specific public policy goals, an action plan to accomplish them, and performance metrics by which to measure progress.

In early 2005, a group of eight Philippine cities became the first local governments to adopt the performance governance system. By late 2009, over 40 Philippine local governments were working with ISA, along with more than a dozen national public agencies and civil society groups. While progress has not been uniform, the positive impacts are clear for those cities that are successfully implementing the PGS. For example, several cities are now generating significantly more local revenue, enabling them to both reduce their financial dependence on the central government and make additional investments in their communities.

Such improvements in public governance are, in large part, made possible by the systems and practices introduced by the PGS and the enhanced capacity of local institutions brought about by ISA training. Moreover, by institutionalizing the input of community groups and business associations in the policymaking of local governments, the PGS process encourages democratic participation. This, in turn, strengthens the incentives of public officials to improve transparency, foster economic growth, and improve the quality and reliability of public services. The successes give reason to hope that reform can take hold in the Philippines.

John Morrell is a Program Officer for Asia at CIPE. He has experience with development projects throughout the world on issues such as micro-finance, emerging market risk analysis, non-profit management, governance, and urbanization. He has conducted several studies on topics related to corruption and public sector governance and has helped direct internal fraud investigations of multinational corporations. John Morrell holds a bachelor’s degree in economics from the University of Virginia, a master’s degree in public policy from Georgetown University, and was a Graduate Fellow in the International Management Program at Oxford University.